Telco Sues Municipality For Laying Their Own Fiber

unreceivedpacket writes "Ars Technica reports that a company called TDS Telecom is attempting to sue the town of Monticello, Minnesota for deploying their own fiber network. Shortly after the town voted to lay the fiber, TDS Telecom filed suit and notified the town that they would be deploying their own fiber network. The telco has recently responded to Ars Technica, saying they only sued to save Monticello from itself, apparently feeling that the municipality is unprepared for the onerous costs of maintaining such a network, and would lack the expertise to do so."

Craziness

[TheSpoom (715771)]

Expect to see the telecom draw out this lawsuit as long as they can possibly take it (think SCO here) and deploy their own network in the meantime, then sue the town again if they try to lay their own network thereafter for tortious interference with business practices or other such legal BS (IANAL and don't know what statutes they could use).

Craziness. I hope a judge knocks this down quick, but I'm not optimistic.

It's basically the company telling the town, "Stay the fuck out of our business or it'll cost you dearly. It's our monopoly, dammit."

Re:

[erareno (1103509)]

I hope the town counter-sues with anti-trust suits just to screw with this company.

Re:Craziness

[cayenne8 (626475)]

Sad...I am pretty much for the smallest, most unobtrusive, non-invasive govt possible, especially for the feds, but, I do feel one of the few things govt. is for, is infrastructure...and to me that would be laying down phone lines, cable and fiber...but, not have them run it. The companies could then have access to them to provide services and have actual competition. Much like the govt. puts down highways...but, private companies run the gas stations along the way....

Re:Craziness

[wisty (1335733)]

Yes, if the council screws up maintenance, they can just sell it on to somebody who can handle it. They don't need to be protected from themselves, if it doesn't work they can sell it.

Re:Craziness

[cayenne8 (626475)]

Well, I don't see too much wrong with the city laying down the cable/fiber/etc...and contracting out someone to maintain it. Separate maintenance of hardware from service....let the svc. companies compete for the users needs....

I too hate an extra layer for the user to resolve problems...but, in this case...I think it might be justified to give the user the best service for his $$'s, and to also keep the govt. out of the regulation of said service.

Re:Craziness

[fahrbot-bot (874524)]

Yes, if the council screws up maintenance, they can just sell it on to somebody who can handle it.

I think there's a network admin [networkworld.com] in San Francisco that can handle this...

Then make the largest raceways possible.

[RustinHWright (1304191)]

I agree that government should play a role in infrastructure but if they're going to do it at all, then they should spend the additional money to make those channels as large as possible. If they need an eighteen inch channel, then maybe they should do a twenty-four inch one, and so on. If they're planning to spend the money to dig up streets, create utility vaults [google.com], and so forth, then let them spend the money to do it right the first time and create a right of way that will then be available for other services. The more space they put in now, the less money they'll have to spend later on and the easier it gets to do maintenance without digging up the streets again.

If it were up to me, municipalities all over the place would be putting in precast, modular component tunnels [uvauburn.com] under major streets that would be big enough to stand inside and to carry telecom lines, electrical lines, gas lines, and so on, all on top of water and sewage lines. This would cut monopoly power waaay down and massively decrease the cost, likelihood, and problems related to breakdowns, not to mention make things like greywater processing much more practical.

Re:Then make the largest raceways possible.

[RustinHWright (1304191)]

Look up "the wikipedia" on what, exactly? You're being a bit vague. Gas? Electricity? Or should I just look for the entry on "bad stuff"? As for risk, are you somehow under the impression that gas lines and electrical lines are somehow safer when they can't be regularly inspected or maintained? Make no mistake, gas lines and electrical lines do fail, and they do so more frequently and at higher cost and risk when they are hard to reach and are more of a danger to the community when they're hard to repair. Do you think that it's safe to have to dig up streets where a gas main is broken open?

What seems "kinda stupid" to you is considered far safer by silly folks like electrical engineers, civil engineers, facilities managers, and building code regulators. But now that you've explained it to us all in such convincing detail I'm sure that they'll change their minds.

If, perhaps, you just haven't thought it through, as it happens, I've written a little overview on the subject [typepad.com]. I wasn't planning to linking to it in this thread but in the face of your devastating and profound critique I thought that maybe you could use just a few more facts to help refine your admittedly already deeply wise understanding.

Re:Craziness

[megamerican (1073936)]

town doesn't have money to keep fighting legal battles.

Not True. According to their Comprehensive Annual Financial Report [govoffice2.com] (CAFR) they have $37.8 Million in Cash Investments alone. That should get them some decent representation.

Google any your city plus CAFR and see how much money your city/county/school district/state is hiding from you.

Re:Craziness

[jd (1658)]

Taxpayers aren't necessarily good at taking a long-term view. Yes, the investment should benefit the taxpayer (investing in infrastructure, decent education - things that build up the society over the long-term) but should probably not go into the taxpayer's pockets. The recent US "tax refund" was no such thing, since everyone knew damn well the money would end up in the hands of merchants almost immediately. Most likely, the populace got nothing of any worth out of the deal - the amounts involved were far too trivial and Americans work on a debt culture not a saving culture. Pure bread and circuses. All illusions to make people feel better, without giving them anything worth feeling better about.

On the other hand, the sum total of cash was quite considerable. Had the same total amount been spent on, oh, debugging the US educational system, or getting Amtrak some more rolling stock, people may not have experienced the same peak level of happiness, but a whole lot more people would have had actual value added to their lives.

I know, I make a lousy American. Blame the British in me. But blame or credit, it is indisputable that Governments have the resources to invest in things that will have a longer-term benefit to many, individuals (barring the super-rich) barely have the resources to invest in things that will have any meaningful (ie: not bread and circuses) impact on even themselves. They certainly can't affect anything beyond the tiniest of microcosms in the macrocosm of an entire nation. That's why, tens of thousands of years ago, they figured out how to organize collectively to do such stuff.

Doesn't surprise me one bit

[by Anonymous Coward]

Much of the populated areas of Monticello resemble an industrial park. Whoever is in control of that fiber is in for some serious cash from the plants that have setup shop there. This will be a damn interesting battle, the city will fight this tooth-and-nail.

Re:Craziness - from a Monticello, MN. resident

[by Anonymous Coward]

I Live in Monticello, Mn. and have been following this for some time. I'm fully in favor of this and believe it's in the best interest of the community. It'll benefit home users, but it's even more critical to attract big business and help grow the town.
Just a couple of things I want to set straight.
    First, Monticello is being sued by Blackwater Communications (TDS) for using bonds to pay for the city fiber network. They can't stop the city from putting it in, but they're trying to make it painful. Originally it was to pay for itself and not cause additional taxes. The mayor has now openly said it may take taxes to do it, but the city will see it through.
    Second is that several years ago, TDS, as well as the local cable co. were approached by the city to partner in this effort. Both flat out said no.
    Third, only after the city was about to break ground did TDS decide to put in there own fiber network. Which by the way, I don't believe is truly fiber all the way to the wall. Seeing that the cities network fails is the only way to control pricing as the city had already stated what services would cost and trust me, it blew TDS out of the water!
    Fourth, TDS has also begun a misleading campaign calling local residents, including myself, telling them about how the cities network will be under par and how business services are superior. Funny, cause I work in IT and am pretty technical; BS always smells! It's all about what "Joe Schmoe" doesn't know and how they usually believe what they are told. Oh ya, and the idiots accidentally called the mayor pitching the bull; oops! They've also started blanketing the neighborhoods with 1-year free broadband offers. Read the fine print cause if you bite your screwed! It's another way to lock things up by removing potential customers for the cities network. I get these adds in the mail literally every couple of days. I'm so sick of it I'm considering calling them and telling them not to mail me.
    Personally I can't stand TDS anymore and won't even consider using them for anything EVER again. My land line with them has been dropped, my internet switched to cable (until the cities fiber is available), I use my cell and Skype. This is a prime example of corporate greed hurting the community!

Re:Craziness

[pruffin (1363141)]

I live in Monticello and know how TDS has been strangling our town with high telephone rates and extremely terrible service. I have no love or loyalty for TDS. For example if you live in Minneapolis you can call Monticello free of charge. To live in Monticello you are forced to pay a toll charge or buy a more expensive phone package to get access to 612, 651 or 952 exchanges. People in Monticello have been forced to pay for service at rates and fees far above what all our surrounding neighbors have to pay. The real interesting thing about this situation is that the choice to put a city owned fiber loop and allow the city to compete with TDS was voted on by the residents of our city. We democratically voted for the city to compete against TDS. The majority of people in Monticello do not like doing business with TDS and when given the opportunity to choose another service provider we did. We do not need to be saved from ourselves as TDS would state but from the high costs and poor service from a company who has really overstayed their welcome in my town and used their monopoly to rape our pocketbooks. It is interesting that TDS did not start trying to upgrade their services or attempt to bring the population of Monticello any REAL modern services until the city started to make their move to bring fair and honest services to our community.

Re:Corporatism

[megamerican (1073936)]

And the neocons say unregulated capitalism isn't destroying our democracy. Eisenhower, how we miss thee...

What you don't realize that every city in the United States is ran like a corporation!

Every city/county/state/school district must publish a Comprehensive Annual Financial Report (CAFR), just like every corporation must publish and Annual Financial Report and send it to their stockholders.

Here is Monticello, MN CAFR [govoffice2.com]. They have $37.8 Million in cash assets alone. Simply google CAFR and any government institution to see how much money they're hiding from you (its in the open but kept separate from their annual budget).

Re:Corporatism

[plasmacutter (901737)]

You don't have unregulated capitalism. That would actually be a good thing. While there is a government there is no unregulated capitalism. without a government this wouldn't even be an issue.

sorry, wrong.

I live in the southeast.

Whenever a hurricane hits the gas prices shoot up a buck because the republicans killed off the regulations on oil speculation, and refuse to punish oil cos when they go-a-gouging.

The last time we had "unregulated capitalism", snake oil salesmen made people wary of medication, meat was as hazardous as nuclear waste, and we had a stock market crash that put 30% of the populace into hoovervilles.

The correct answer is "proper regulation".. the kind that places big business and the government at loggerheads.

When big business and government fight each other making no gains, the little guy wins.

Re:Corporatism

[liquidpele (663430)]

you're splitting hairs. Unregulated capitalism LEADS to corporatism. If you don't regulate companies so that they can't take advantage of people and things, they will act in manors which destroy the middle class (the foundation of a good economy).

Re:Corporatism

[jd (1658)]

In this case, you are not only correct in the way intended but also in the way the typo implies (unregulated corporations act like the old-style feudal Lords in their Manors).

I see lots of unknowns here.

[RustinHWright (1304191)]

If this were just about fiber to private homes, then maybe I would agree with you. But first of all, this system is planned to start out with fiber for schools and other municipal users. Secondly, what about commercial users? 25 million for 12,000 private homes is Sarah Palin territory. Huge debt for minimal gain. But since Monticello is home to quite a few office parks, we're talking about, at the least, several hundred business users, each of whom should and hopefully would bear some of the tax burden of this as well as getting much of the gain.
Now, if we're thinking about this as a business, which is a distortion but I'll run with it, it's normal for telecom companies to spend as much as a couple thousand dollars to acquire business customers. So if we assume five hundred businesses, then we're talking about just acquiring that business being worth about a million of that money. If we assume 700 children of school age who would use that service, well, buying computers for that many kids would last nowhere near as long and would cost over a million bucks, all things considered.
It all comes down to numbers, though, doesn't it? Do we compare this to a sewage system, which will deliver value for a hundred years or more, or do we compare it to a wireless network which will need to be rebuilt every five years or so?
How many years of service would this proposal provide?
How much of this money goes for short-term equipment like routers and how much for long-term infrastructure like fiber and putting in channels?
Who will own that city-provided infrastructure?
How many customers will use this?
Of what types?
Will they billed for this and if so, how?

I don't know. And afaict, neither do you. You've got interesting and useful things to say about the contract type and such, for which I thank you. But as for total net value, unless you've got answers to most or all of the questions above, you might want to get off your high horse a bit and cut them a little more slack.

"they only sued to save Monticello from itself"

[unity100 (970058)]

please someone tell me that this is a f@ckin joke.

Re:"they only sued to save Monticello from itself"

[by Anonymous Coward]

Well yeah it's a fuckin' joke, just not the "ha ha" kind.

Phew...

[introspekt.i (1233118)]

If only we had more good corporate neighbors like this that solved our own problems and did our thinking for us so we don't have to.


Good lookin' out, TDS. Cough.

Inane

[runlevelfour (1329235)]

In a nutshell the telco is suing the city with the justification that they are protecting the city from itself? I think I would have a lot more respect if they just came right out and said they didn't want the city as competition. If you're going to be a greedy soulless corporation then be one for crying out loud. Knock off the fake altruism because no one is buying it. And I recommend they hire a better legal team. Every soulless corporation requires a top notch crack team of lawyers to distort and manipulate the law in their favor. "any utility or other public convenience from which a revenue is or may be derived." I know next to nothing about law but even I can see this is cut and dry. The city raised bonds to provide what is definitely a public convenience, yet the telco sues anyway. Unfortunately I think their tactic is to try and get an injunction then keep the case in court for the next two decades.

Re:Inane

[Russ Nelson (33911)]

I bring my own lampshade. Can't rely on the host to have one that fits.

So Just....

[mikerubin (449692)]

How do towns set up a municipal electric service without being sued?

More importantly, how many speeding/parking/jaywalking tickets does this Telco plan to get when passing through town?

Support The Municipality (We're Onto You)

[mrbah (844007)]

Why let a town build a network with taxpayer money when you can build a network with that same money, then charge them again for using it? It's the classic telco business model.

Re:Support The Municipality (We're Onto You)

[mcrbids (148650)]

Why let a town build a network with taxpayer money when you can build a network with that same money, then charge them again for using it? It's the classic telco business model.

I think you are missing a very key point, here. It's true that telcos were paid government funds to build a significant part of the telephone network. But it's also true that in the vast majority of cases, those parts are the UNPROFITABLE parts.

Let's say you have a water pumping service, doing business in town, and you're making whatever profits you are making. For this example, we'll ignore the fact that most communities have community water. Business is good, you're expanding to cover more and more houses, starting with the most profitable ones first. (densest neighborhoods)

But then de gubbmint comes in and tell you that you have to do a bunch of stuff in order to continue to do business, because of the benefits to the general health of the community or whatever. For example, since you provide water to some houses in your town, now you have to provide water to ALL houses in your town.

Now, it's not as though you wouldn't love to serve all the houses in the town, but some of those houses are over a mile apart! Just the cost to dig the pipes out that far will cost you over $10,000 per house! Since you are charging $50/month for water service, it's going to take almost 20 YEARS before you even break even on the base cost, nevermind the finance charges you'd incur to borrow the money to deliver the service the gubbmint requires!

And you can't charge the homeowners, either - they aren't buying anything, they didn't ask for it, and making them pay would be onerous on them, too.

So, in circumstances like these, it's very typical for the private company (your water company) to ask for funding to assist in the problem areas. It often comes as a sort of deal: Your water company enjoys a monopoly status, subject to various regulations that you have to perform, in exchange for funding to cover the plumbing for the unprofitable areas.

So the net effect goes something like this:

1) Your company is now a monopoly that must turn in a Profits and Loss statement, along with proof of regular water testing to the city council every month or so. You cover 100% of the houses in the community, and you have no effective competition. One of your concessions is that the municipality can levy taxes via your bills. You have to calculate this bill, and turn over the tax money to the city quarterly.

2) The city has now satisfied its goal of everybody having 100% availability to clean drinking water. It's paid for costs of plumbing by taking out a bond, secured against a tax raised against people's water bill.

3) Everybody who lives in the community now pays a 5% monthly tax on the water bill to cover the cost of plumbing outlying areas. Financially, it's a raise in your bill if you were already contracted with the water company when it was all private, it still brings benefits such as improved local economy resulting from the improved infrastructure.

Re:Support The Municipality (We're Onto You)

[Reziac (43301)]

It works rather differently here in outlying parts of Los Angeles County, and I'm sure this isn't unique:

The local water companies charge $15k to hook up to the water network, plus a monthly usage bill.

However, they've lately taken it a step further: If you live within one of these private water districts, drilling your own well is now prohibited (even in very rural areas). In fact, if you have an existing well and it is shut down for ANY reason (even something that would normally be temporary) -- you are prohibited from restarting your well, and you MUST hook up to the water company's system.

Needless to say, this gov't-enforced enhancement of their busines model makes the little local water companies delerious with joy.

Now, if you're starting from no water at all, they're not a bad deal compared to a well -- their water usage rate costs about half what pumping it yourself does, and the hookup cost is about 1/3rd of the price of a new well. But if you have an existing well, and are forced to switch over, you just got robbed of the $40k+ it cost you to drill it, plus the $15k charge for new hookups.

(And no, this isn't hearsay; it's straight from a conversation I had with the president of a local water company.)

Re:Support The Municipality (We're Onto You)

[mrchaotica (681592)]

...is frequently accompanied by regulated profits.

DING DING DING! WE HAVE A WINNER!

See, that's the thing that people don't seem to get: these telcos got the tax dollars, but aren't being subject to regulations, which is the entire problem!

Well in that case

[treeves (963993)]

...the municipality is unprepared for the onerous costs of maintaining such a network, and would lack the expertise to do so

It was right magnanimous of 'em to sue.

Thanks, but no thanks

[Auckerman (223266)]

How is this any different than a town building a road. A solid internet infrastructure is just as important to city/state growth as a the transportation system. It's just simple.

"No fair, I can't compete with the state." is not a good enough reason for me to care about your problem. Things like this would have been used to stop building the Interstate system in late 50s. Reasoning like this has allowed the infrastructure of the US to suffer, because someone companies are magic beings that solve problems and the government just ruins your life.

Re:Thanks, but no thanks

[stinerman (812158)]

Yeah, competing companies are magic beings (although of course they don't mean to be) and the government just ruins your life )when it tries to do more than keep the peace).

You're not a LISP or Scheme programmer by chance, are you?

Freaking retarded

[afidel (530433)]

My boss lives in a town that has had their own utilities for over a century and they have stellar service and prices are lower than the crappy monopolies provide. It started with their own power station and over the years they added phone, cable, and fiber internet services. If they need service they get local people that actually care about fixing their issues and local students can get internships that teach them marketable skills. All this and they pay much *less* than the government granted/privately run monopolies in most surrounding areas. A good example of the non-financial benefits this has provided include the fact that they were one of the few communities to have power during the great NE blackout of 2003. Basically it comes down to the fact that there is a certain cost of building and maintaining the infrastructure, and if you let a monopoly private business run it you have to pay those costs over time plus the profits that are expected by the owners of that company.

Madness!

[bogaboga (793279)]

...they only sued to save Monticello from itself, apparently feeling that the municipality is unprepared for the onerous costs of maintaining such a network, and would lack the expertise to do so...

So the company loves the city more than the city loves itself?

How ironic! This sounds preposterous to me.

These United States never cease to amaze.

Maintenance Cost of Fiber are Actually Lower

[absent_speaker (905145)]

From what I understand, maintaining fiber networks isn't all that hard. In many cases, it's lower maintenance than existing infrastructures.

Switching from copper to fiber is a big deal in heavy manufacturing and especially in electric plants. Most electric plants are heavily wired with copper. Problem is that copper is more prone to interference. When copper fails, it can be quite difficult to isolate the failure. Copper is also several orders of magnitude lighter (weight wise) than copper and a lot less bulky. Vendors usually quote a "50%" cost reduction from copper.

In the building trades, fiber only construction saves a good amount of space and labor. I've read that medium size office buildings can sometimes shave $300,000 off their construction costs.

I can't recall exactly, but I believe most new airplanes are being built with fiber. It's much easier to install and maintain than the copper it replaces. I remember reading years ago that some lab at MIT (I believe) developed a device to allow fiber optic cable to directly replace the copper wiring coming out of the instrument panels. I am afraid I can't remember reading if this was ever implemented.

I'm not an expert, but I think the rational for this lawsuit is rather weak. I don't know what else their town is working on, but I doubt they expect their parks and recreation staff to maintain their fiber network. They'll hire a subcontractor, probably the same people the telcos were going to hire and be done.

Good for them.

What a load

[FranTaylor (164577)]

Towns already run their own water pipes, sewer pipes, fire alarm systems, roads, etc. What is one more cable?

I call BS if you say running fiber takes more expertise than running water and sewer pipes. Electrons can go uphill of their own accord, water needs help.

How ISP should be run

[corsec67 (627446)]

Monticello hatched an ambitious plan to wire up its entire town with fiber, build an interconnect station, and allow ISPs to link up to the site and offer Internet access over the city-maintained fiber links.

Since the fiber plant is going to be a monopoly, this is how internet access should be sold: have the part that is going to be a monopoly be regulated, and then allow competition where that is easy.

The only trick is not allowing the people in charge of just the fiber to interact with the data running over that fiber, as the Canadians are discovering with Bell [arstechnica.com].

When Ann Arbor was about to repave Division st

[Ungrounded Lightning (62228)]

I recall, decades ago, when Ann Arbor was about to repave Division street - the main north-south drag for the core city. They were going to do it up properly so it would last.

They'd had a lot of trouble with utilities tearing up the roads to work on their underground stuff, then not restoring them adequately. (In southern Michigan winters this resulted in frost heaves that soon tore the road back open, resulting in the need for more repairs - sometimes over and over. By which time the information about which utility had torn it up originally had been lost.)

They couldn't really ban them from digging up the street to work on their stuff.

So they passed a new ordinance that would result in a MAJOR cost for any company that tore up the street AFTER it was redone, for a decade or so, and gave 'em some large number of months to get their underground installations fixed up and upgraded before the repaving. (I think they imposed some "fee" - read "fine" or "tax" - but don't know the details.)

That street was dug up all summer as the several utility companies rebuilt everything under it and installed new conduit and manholes for future expansion. (Better to get it in now, while there's no special issues on doing the work, than take the chance that the city's post-repaving gotchas would stick in court - or cost more in court fees to get them struck.)

And that road surface stayed pristine for years.

Now it seems to me that, if this telco wants to play hardball, this municipality could find similar stuff to do to them. B-)

Granted that the courts might eventually strike down whatever the city does as unfair competition, too. But it would still cost the telco more money to get that to happen - and tit-for-tat is well recognized as a very successful strategy.

Downside is it needs to be done in a way that doesn't end up stalling both projects while the citizens sit on their thumbs waiting for an internet connection.

= = = =

Also: Didn't a federal court just strike early-termination fees for cell phone providers? Might be possible to go after that if the telco does a long-term contract lockin to try to keep the citizens on their net once the delayed city net is live.

A little background from a resident

[dont_forget (71107)]

I live in Big Lake, MN which is just a few miles away from Monticello, MN. The story misses a few things. First of all Monticello approached the Bridgewater to build the fiber network, and Bridgewater decided not to. So Monticello went ahead and decided to do itself. The second thing people should know is that Monticello does not have a normal small town finance system. Monticello Nuclear Generating Plant provides a huge cash influx to the city, allowing it to pursue large projects.

Protection racket

[Duncan Blackthorne (1095849)]

Knowing how most telecoms seem to operate in this country (Comcast, AT&T, Verizon, etc) I seriously doubt they're suing "for the benefit of the community". More likely it's "Aww, you hurt our feelings by leaving us out of the loop, so we're going to send over the firm of Guido, Guido, and Guido, Attorneys at Law, to have a little 'talk' with you about it -- in court". I imagine if that doesn't work, they'll resort to the time-honored methods of burglary, arson, and assault to "get their point across".

*spits on ground in disgust*

The way I would build a municipal fiber network...

[Skapare (16644)]

...would be to build as just a foundational infrastructure. It would be fiber all the way from each home and business to the various connection points. These would be buildings, not little pedestals. These fibers would then be leased out to any company wanting to provide services over them. There would be 4 actual optical fibers to each home and business (more for special cases), so it would be possible for "light up" providers to offer only one type of service, and customers could get their phone, TV, and internet, from different providers if they so choose. Or people and businesses could lease them directly to have a very high speed point to point service wherever they want.

It's not competing against the telco ... it's providing them with a fiber based infrastructure they can use. It's not competing against cable TV ... it's providing them with a fiber based infrastructure they can use. It's not competing against broadband services ... it's providing them with a fiber based infrastructure they can use.

It's just a road. The city and state generally build roads and let people use them. The directions the telcos and cable TV companies are trying to go is the equivalent to not only them building the road, but also them building all the vehicles and allowing no other vehicles on the road, and them restricting what parts of town people are allowed to even go to.

Cities often provide public transportation. So some basic default services is not out of the question, anyway. But it might get structured so it is not a major competition. For example, it might provide connectivity only within the city itself and not to the world internet. It might carry only over-the-air TV stations, and not all those satellite based national channels.

I'd bet a lot of business would love to jump in and provide services over an infrastructure they don't have to pay all that up front cost to build. Whether it's paid for by leasing the fibers, or by taxes, is something the city would have to decide.

The situation, in haiku form

[BcNexus (826974)]

a series of tubes /
made of many fiber strands /
stymied by lawsuit

Re:what?

[by Anonymous Coward]

I read TFA and I still have no idea what the legal basis of this claim is. Does anyone have any idea on what grounds they are suing?

On the basis that any suit will cost the town more than it will the telco, if not in dollars then in time. The article explains this quite clearly (make sure you read both relevant Arsicles).

Re:what?

[Red Jesus (962106)]

FTFA:

Bridgewater Telephone argues that the city cannot use tax-exempt bonds to "enter into direct competition with incumbent commercial providers of telephone, Internet, and cable television services."

The city decided to lay cable. Bridgewater Telephone interrupts, "Too bad, because that would put you in direct competition with our cable. The word `incumbent' is probably the reason this argument won't work. Bridgewater's cable did not exist at the time of the city's decision and, in fact, it does not exist now. But according to TFA you say you've read, that's the legal basis of the claim.

Re:what?

[Sun.Jedi (1280674)]

Revenue bonds.

The telco is saying that the town would not be able to -even- -think- about building a fiber network if it was taxpayers money footing the bill(many of whom may not utilize the service).

Because bonds are being used, and the business model pays for itself with little financial risk to the town, the telco is saying its an unfair business advantage.

Imagine that... a town with the intellect and means to provide a service the people actually want, and are willing to provide it the way the people actually want it.

suddenoutbreakofcommonsense

I hope the town wins. Hard, and fast.

Re:what?

[X0563511 (793323)]

We don't need more legislation. We need the judicial branch (ie, the court the suit is going into) to do it's job. Whether that would lie in the town or the telco's favor, I won't side - but this is not something legislation should fix.

Re:what?

[Belial6 (794905)]

Sure it should. If there is a law that makes what the city government is doing illegal, the legislature can repeal the law.

Re:TDS Is An Effing Joke

[Russ Nelson (33911)]

And who are you?? Fucking George Carlin?

If the guy wants to be a namby pamby who can't say what he means, then leave him alone.

Re:Yes and no

[afidel (530433)]

Fiber to the home is what is known as a natural monopoly, there is an (essentially) fixed cost for deploying and maintaining such a utility and it is extremely inefficient and cost-ineffective to have multiple providers of the same service. The most efficient way to address this is to do exactly what the city set out to do, have a government run entity maintain the physical plant and allow competing private business to provide products over that plant. If you allow a monopoly private business to maintain the plant you simply increase the subscribers costs by the profit of the private business (baring any economies of scale enjoyed by the company operating a business larger than the incorporated area, but history has shown this is generally minimal and far overshadowed by the profit costs)

Re:Not a government's job

[Fulcrum of Evil (560260)]

this is a town trying to build out infrastructure to support its residents; it's certainly something within their purview. Personally, I think this is a better setup than letting the telco own the lines, since there's no incentive to gouge, and this sort of thing can work out just fine.

Re:Not a government's job

[PacketShaper (917017)]

Sorry, wrong. The *federal* government should do as little as possible. Regulate interstate commerce, defend our borders and coin money, specifically.

This is a perfect example of something a *local* government should do, if the local populace votes and approves of it.